Q1 2026 Univest Financial Corp Earnings Call

April 23, 2026

Operator 2: Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the Univest Financial Corporation Q1 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Jeff Schweitzer, Chairman, President, and CEO of Univest Financial Corporation. Please go ahead.

Operator: Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the Univest Financial Corporation Q1 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Jeff Schweitzer, Chairman, President, and CEO of Univest Financial Corporation. Please go ahead.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

Speaker #1: If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Jeff Schweitzer Chairman, President, and CEO of UNIVEST Financial Corporation.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Rebecca, and good morning, and thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Kime, our Chief Operating Officer and President of UNIVEST Bank and Trust, and Brian Richardson, our Chief Financial Officer.

Jeff Schweitzer: Thank you, Rebecca, and good morning and thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Kime, our Chief Operating Officer and President of Univest Bank and Trust Co., and Brian Richardson, our Chief Financial Officer. Before we begin, I would like to remind everyone of the forward-looking statements disclaimer. Please be advised that during the course of this conference call, management may make forward-looking statements that express management's intentions, beliefs, or expectations within the meaning of the federal securities laws. Univest's actual results may differ materially from those contemplated by these forward-looking statements. I will refer you to the forward-looking cautionary statements in our earnings release and in our SEC filings. Hopefully, everyone had a chance to review our earnings release from yesterday. If not, it can be found on our website at univest.net under the investor relations tab.

Speaker #2: Before we begin, I would like to remind everyone of the forward-looking statements disclaimer. Please be advised that during the course of this conference call, management may make forward-looking statements that express management's intentions, beliefs, or expectations within the meaning of the Federal Securities Laws.

Speaker #2: UNIVEST's actual results may differ materially from those contemplated by these forward-looking statements. I will refer you to the forward-looking cautionary statements in our earnings release and in our SEC filings.

Speaker #2: Hopefully, everyone had a chance to review our earnings release from yesterday. If not, it could be found on our website at univest.net under the Investor Relations tab.

Speaker #2: We had a strong start to the year as we reported net income for the first quarter of 27.1 million dollars, or 96 cents per share, which was a 24.7% increase compared to earnings per share in Q1 of 2025.

Jeff Schweitzer: We had a strong start to the year as we reported net income for Q1 of $27.1 million, or $0.96 per share, which was a 24.7% increase compared to earnings per share in Q1 of 2025. The results were solid across our lines of business, resulting in our ROAA improving to 1.33% for the quarter. Additionally, we continue to execute on our initiatives to lower our loan-to-deposit ratio, which on average was 280 basis points lower than Q1 of 2025, and our efficiency ratio, which declined 190 basis points from Q1 of 2025, showing improved operating leverage as we continue to see results from our investments in technology over the past few years.

Speaker #2: Results were solid across our lines of business, resulting in our ROAA improving to 1.33% for the quarter. Additionally, we continue to execute on our initiatives to lower our loan-to-deposit ratio, which on average was 280 basis points lower than Q1 of 2025, and our efficiency ratio, which declined 190 basis points from Q1 of 2025, showing improved operating leverage as we continue to see results from our investments in technology over the past few years.

Jeff Schweitzer: Our strong results for the quarter also resulted in our rewarding our shareholders by increasing our quarterly dividend 4.5% to $0.23 per share and buying back 351,138 shares of our stock during the quarter. Before I pass it over to Brian, I would like to thank the entire Univest family for the great work they do every day and for their continued efforts serving our customers, communities, and each other. I will now turn it over to Brian for further discussion on our results.

Speaker #2: Our strong results for the quarter also resulted in our rewarding our shareholders by increasing our quarterly dividend 4.5% to 23 cents per share, and buying back 351,138 shares of our stock during the quarter.

Speaker #2: For our pass it over to Brian, I would like to thank the entire UNIVEST family for the great work they do every day and for their continued efforts serving our customers, communities, and each other.

Speaker #2: I'll now turn it over to Brian for further discussion on our results.

Brian Richardson: Thank you, Jeff, and thank you to everyone for joining us this morning. I would like to start by touching on four items from the earnings release. First, we saw a solid NIM expansion during the quarter, with reported NIM increasing 23 basis points to 3.33%. Additionally, core NIM, which includes excess liquidity of 3.44%, increased seven basis points compared to Q4. Second, during the quarter, credit quality remained strong, and we recorded a provision for credit losses of $1.3 million. At 31 March, non-performing loans and leases represented approximately 0.25% of total loans, and our allowance for credit losses remained steady at 1.28% of loans held for investment. Net charge-offs for the quarter totaled $1.3 million, or seven basis points annualized. Third, non-interest income increased $1.7 million, or 7.5%, compared to Q1 2025.

Speaker #3: Thank you, Jeff. And thank you to everyone for joining us this morning. I would like to start by touching on four items from the earnings release.

Speaker #3: First, we saw solid NIM expansion during the quarter with reported NIM increasing 23 basis points to 3.33%. Additionally, core NIM, which includes excess liquidity of 3.44%, increased 7 basis points compared to the fourth quarter.

Speaker #3: Second, during the quarter, credit quality remained strong, and we recorded a provision for credit losses of 1.3 million dollars. At March 31st, non-performing loans and leases represented approximately 0.25% of total loans, and our allowance for credit losses remained steady at 1.28% of loans held for investments.

Speaker #3: Net charge-offs for the quarter totaled 1.3 million dollars, or 7 basis points annualized. Third, non-interest income increased 1.7 million dollars, or 7.5%, compared to the first quarter of 2025.

Brian Richardson: When excluding BOLI death benefits, non-interest income increased to $2.3 million, or 11%, compared to Q1 2025. This growth was driven by continued strength in investment advisory, insurance, and servicing-related fee income, as well as increased risk participation and swap-related fee income. Mortgage banking revenue increased modestly from the prior period, reflecting higher saleable volume during the quarter. Fourth, non-interest expense increased $3.3 million, or 6.8%, compared to Q1 2025. This included $427,000 of restructuring charges and an increase of $753,000, or 48.8%, in medical claims expense. The corporation maintains a self-funded or self-insured medical plan and is responsible for claim costs up to the stop loss limit. This results in expense volatility based on the timing and magnitude of claims.

Speaker #3: When excluding bully death benefits, non-interest income increased 2.3 million, or 11%, compared to the first quarter of 2025. This growth was driven by continued strength in investment advisory, insurance, and service-related fee income, as well as increased risk participation and swap-related fee income.

Speaker #3: Mortgage banking revenue increased modestly from the prior period, reflecting higher saleable volume during the quarter. Fourth, non-interest expense increased $3.3 million, or 6.8%, compared to the first quarter of 2025.

Speaker #3: This included 427,000 dollars of restructuring charges and an increase of 753,000, or 48.8%, in medical claims expense. The corporation maintains a self-funded or self-insured medical plan and is responsible for claim costs up to the stop-loss limit.

Speaker #3: This results in expense volatility based on the timing and magnitude of claims. Excluding the restructuring charges and increased medical cost, expenses increased $2.2 million, or 4.4%, compared to the first quarter of 2025, which is in line with the guidance that I had provided on January's call.

Brian Richardson: Excluding the restructuring charges and increased medical cost, expenses increased $2.2 million, or 4.4%, compared to Q1 2025, which is in line with the guidance that I had provided on January's call. Turning briefly to our outlook for the remainder of 2026. Based on Q1 performance and current assumptions, we are maintaining our outlook for loan growth of approximately 2% to 3%, provisioning of $11 to $13 million, non-interest expense growth of approximately 6% to 8%, excluding BOLI death benefits, and non-interest expense growth of 3% to 5%. We are updating our full year net interest income growth outlook to the range of 5% to 7%, reflecting the strength of Q1 results continued with margin momentum. Our effective tax rate is expected to remain in the 20% to 21% range. That concludes my prepared remarks.

Speaker #3: Turning briefly to our outlook for the remainder of 2026, based on the first quarter performance and current assumptions, we are maintaining our outlook for loan growth of approximately 2 to 3 percent, provisioning of 11 to 13 million dollars, non-interest expense growth of approximately 6 to 8 percent, excluding bully death benefits, and non-interest expense growth of 3 to 5 percent.

Speaker #3: We are updating our full year net interest income growth outlook to the range of 5 to 7 percent, reflecting the strength of the first quarter results, continued with margin momentum.

Speaker #3: Our effective tax rate is expected to remain in the 20% to 21% range. That concludes my prepared remarks. Rebecca, would you please begin the question-and-answer session?

Brian Richardson: Rebecca, would you please begin the question and answer session?

Operator 2: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jacob Morton with Stephens. Your line is open.

Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jacob Morton with Stephens. Your line is open.

Speaker #1: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.

Speaker #1: We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jacob Morton with Stevens. Your line is open.

Jacob Morton: Hi, good morning. This is Jacob Morton on for Matt Breese.

Speaker #2: Hi, good morning. This is Jacob Morton on for Matt Breese. First, I want to good morning. First, I wanted to start out with deposit cost reductions from this quarter.

Brian Richardson: Good day.

Jacob Morton: Good morning. First, I wanted to start out with deposit cost reductions from this quarter. I'm curious about the spot rate at the end of the quarter. Can you also talk about how much more room you see to lower deposit costs?

Speaker #2: I'm curious about the spot rate at the end of the quarter and can you also talk about how much more room you see to lower deposit costs?

Brian Richardson: We're starting to get to a little bit of a point of equilibrium. Based on the stable interest rate environment, don't expect there to be too much movement in the cost of funds in the near term. If we look at spot, overall, the book, we are down 10 basis points on a spot basis compared to 31 December to 31 March. We do have inherently churning of CDs that are coming off, tend to put replacement dollars on at a little bit lower cost. But as we're looking to grow deposits and decrease our loan to deposit ratio, that inherently puts a little bit of pressure on cost of funds. That's why we don't see potentially more upside, but looking for relative stability there in the near term.

Speaker #3: So we're starting to get to a little bit of a point of equilibrium. Don't expect there to be too much based on the stable interest rate environment.

Speaker #3: Don't expect there to be too much movement on the cost of funds in the near term. If we look at spot, overall, the book, we are down 10 basis points on a spot basis compared to 12/31 to 3/31.

Speaker #3: We do have inherently churning of CDs that are coming off. Tend to put replacement dollars on at a little bit lower cost, but as we're looking to grow deposits and decrease our loan-to-deposit ratio, that inherently puts a little bit of pressure on cost of funds.

Speaker #3: So that's why we don't see potentially more upside but looking for relative stability there in the near term.

Jacob Morton: Got it. Thank you. I appreciate the color there. Moving on. Cash balances came down quite a bit this quarter. Do you feel liquidity is where you want it or more to deploy? If so, how do you intend to do so over time, and what is the time frame for that deployment?

Speaker #2: Got it. Thank you. I appreciate the color there and moving on. So cash balances came down quite a bit this quarter. Do you feel liquidity is where you want it or more to deploy?

Speaker #2: And, if so, how do you intend to do so over time, and what is the timeframe for that deployment?

Brian Richardson: Yeah. The decrease we saw in cash and excess liquidity during the quarter was consistent with what we'd normally see from a seasonality perspective with the runoff of public funds, and then you inherently have the deployment into loans. We'd expect that runoff of public fund dollars to continue at a similar rate here into Q2. We normally hit the trough at the end of Q2 based on the tax collection cycles in Pennsylvania. We would look for that to continue to build. Again, that's just the normal seasonality of public funds outside of any of our deposit initiatives and other things we're looking to do to grow core deposits.

Speaker #3: Yeah, so the decrease we saw in cash and excess liquidity during the quarter was consistent with what we've normally seen from a seasonality perspective.

Speaker #3: With the runoff of public funds and then you inherently have the deployment into loans, we'd expect that runoff of public fund dollars to continue at a similar rate here into the second quarter.

Speaker #3: And we normally hit the trough at the end of the second quarter based on the tax collection cycles in Pennsylvania. And then we would look for that to continue to build.

Speaker #3: Again, that's just a normal seasonality of public funds outside of any of our deposit initiatives and other things we're looking to do to grow core deposits.

Jacob Morton: Got it. Great. Thank you. Last one from me. Can you talk about the loan pipeline expectations for growth over the next few quarters and competitive conditions? Then last, what are incremental yields?

Speaker #2: Got it. Great. Thank you. And last one from me, can you talk about the loan pipeline expectations for growth over the next few quarters?

Speaker #2: And competitive conditions and then last, what are incremental yields?

Michael S. Keim: Good morning. It's Mike Keim. In terms of pipeline is solid for Q2. The biggest thing that we're starting to see is somewhat of a normalization of our prepayment activity. That's actually what saw some of our commercial growth. We actually did lower number of commitments in Q1 than we did prior year, but still did an additional $23 million worth of net growth on the commercial side. Pipelines are solid from a competitive perspective. I would also mention that typically and historically, our quarters, Q2 and Q4 have been our best quarters from a loan growth perspective. I don't see anything in the current picture that would change that. From a competitive perspective, it has got more competitive, especially on the CRE side.

Mike Keim: Good morning. It's Mike Keim. In terms of pipeline is solid for Q2. The biggest thing that we're starting to see is somewhat of a normalization of our prepayment activity. That's actually what saw some of our commercial growth. We actually did lower number of commitments in Q1 than we did prior year, but still did an additional $23 million worth of net growth on the commercial side. Pipelines are solid from a competitive perspective. I would also mention that typically and historically, our quarters, Q2 and Q4 have been our best quarters from a loan growth perspective. I don't see anything in the current picture that would change that. From a competitive perspective, it has got more competitive, especially on the CRE side.

Speaker #3: So, good morning. It's Mike Kind. In terms of pipeline, the pipeline is solid for the second quarter. And the biggest thing that we're starting to see is somewhat of a normalization of our prepayment activity.

Speaker #3: That's actually what saw some of our commercial growth. We actually did a lower number of commitments in the first quarter than we did prior year, but still did an additional $23 million worth of net growth on the commercial side.

Speaker #3: So pipelines are solid. From a competitive perspective, and I would also mention that typically, and historically, our quarters the second quarter and the fourth quarter have been our best quarters from a loan growth perspective.

Speaker #3: And I don't see anything in the current picture that would change that. From a competitive perspective, it continues—actually, it has gotten more competitive, especially on the CRE side.

Michael S. Keim: The good news with that from our perspective is we are playing more on the construction side, which margins are still strong there. On the permanent takeout side and honestly on the strong C&I credits, you are starting to see this get even more competitive than it was. We're still able to play in the niches that we want to and still see strong pricing with where we're originating or funding loans at. Brian can give you the specifics with regard to pricing.

Mike Keim: The good news with that from our perspective is we are playing more on the construction side, which margins are still strong there. On the permanent takeout side and honestly on the strong C&I credits, you are starting to see this get even more competitive than it was. We're still able to play in the niches that we want to and still see strong pricing with where we're originating or funding loans at. Brian can give you the specifics with regard to pricing.

Speaker #3: The good news with that from our perspective is we are playing more on the construction side which margins are still strong there. But on the permanent takeout side, and honestly on the strong CNI credits, you are starting to see this get even more competitive than it was.

Speaker #3: So we're still able to play in the niches that we want to, and still see strong pricing with where we're originating and funding loans at.

Speaker #3: Brian can give you the specifics with regard to pricing.

Brian Richardson: Yeah, it's really consistent with the Q4. What we saw in the Q1, in that kind of mid-six range, is where we were on new commercial loan rates.

Speaker #2: Yeah. We tend to be in the it's really consistent with the fourth quarter, what we saw in the first quarter in that kind of mid-six range is where we were on new commercial loan rates.

Jacob Morton: Great. Thank you. I appreciate all that color. I'll step back.

Speaker #4: Great. Thank you. I appreciate all that color. I'll step back.

Brian Richardson: Thank you.

Michael S. Keim: Thank you.

Mike Keim: Thank you.

Speaker #3: Thank you.

Speaker #2: Thank you.

Operator 2: Your next question comes from the line of Emily Lee with KBW. Your line is open.

Operator: Your next question comes from the line of Emily Lee with KBW. Your line is open.

Speaker #1: Your next question, comes from the line of Emily Lee with KBW. Your line is open.

Emily Lee: Hi, everyone. This is Emily Lee stepping in for Tim Switzer. Thanks for taking my questions and congrats on the great quarter.

Speaker #5: Hi everyone. This is Emily Lee stepping in for Tim Switzer. Thanks for taking my questions and congrats on the great quarter.

Michael S. Keim: Thanks, Emily.

Mike Keim: Thanks, Emily.

Brian Richardson: Thanks for having me.

Speaker #3: Thanks. Thank you.

Emily Lee: Yeah, no problem. My first question is how many Fed rate cuts are baked into your expectations? If we have a flat rate environment, where do you anticipate the NIM shaking out? What would the impact of 125 basis points Fed rate cut have on the NIM?

Speaker #5: So much yeah, no problem. So my first question is, how many Fed rate cuts are baked into your expectations? And if we have a flat rate environment, where do you anticipate the name shaking out?

Speaker #5: And then what would the impact of one 25 Fed rate cut have on the NIM?

Brian Richardson: When we came into the year, my initial guidance and our initial guidance was based on 2 rate cuts in the year. As I had indicated at that time, the first couple of rate cuts really is not impactful to our overall, exclusive of short-term timing within a given quarter and just the timing of how things reprice, not overly impactful to our NII or NIM in the near term. With the fact that now if there's an expectation of lower or reduced rate cuts, not really expecting that to have an impact on our guidance. Call it whether there's 2 cuts or no cuts, we're kind of in the same range as the guidance that I provided.

Speaker #3: So when we came into the year, my initial guidance and our initial guidance was based on two rate cuts in the year. But as I had indicated at that time, the first couple of rate cuts really is not impactful to our overall exclusive of short-term timing within a given quarter and just the timing of how things repriced, not overly impactful to our NII or NIM.

Speaker #3: In the near term. So therefore, with the fact that now if there's an expectation of lower or reduced rate cuts, not really expecting that to have an impact on our guidance.

Speaker #3: So, call it whether there are two cuts or no cuts, we're kind of in the same range as the guidance that I provided.

Emily Lee: Great. Thank you. Kind of switching to capital. On capital deployment, you've continued to be active on the buyback front with about $12 million of repurchases this quarter. How should we think about the buyback story going forward given your current capital position? Do you kind of anticipate you sticking around the $10 million-plus range quarterly or would you guys pull back at all?

Speaker #5: Great, thank you. And then, kind of switching to capital—on capital deployment, you continue to be active on the buyback front, with about $12 million of repurchases this quarter.

Speaker #5: So how should we think about the buyback story going forward given your current capital position? And do you kind of anticipate these sticking around the 10 million plus range quarterly or would you guys pull back at all?

Jeff Schweitzer: Emily, this is Jeff. No, I don't anticipate us pulling back on buybacks. It's a balance between loan growth, timing of loan growth, where you might see a slight increase in our ratios compared to what we're targeting. Overall, we don't anticipate pulling back on buybacks anytime in the near future.

Speaker #3: Emily, this is Jeff. No, I don't anticipate us pulling back on buybacks. It's a balance between loan growth, timing of loan growth, where you might see a slight increase in our ratios.

Speaker #3: Compared to what we're targeting, but overall, we don't anticipate pulling back on buybacks in any time in the near future.

Brian Richardson: Yeah, this is Brian. Just to elaborate a little bit further. As we have indicated in the past, we really do not, the metric we most closely monitor is CET1. We do not look for that to materially grow or really grow at all. During the quarter, we came into the year at 11.22. We finished Q1 here at 11.32. We do not look for that to continue, and we actually look to ratchet that back down to that 11.22 or lower range here. We would be ramping up buybacks accordingly to target that.

Speaker #2: Yeah. And this is Brian, just to elaborate a little bit further. As we have indicated in the past, we really do not the metric we most closely monitor is CEP1.

Speaker #2: We do not look for that to materially grow or really grow at all during the quarter that did we came into the year at 1122.

Speaker #2: We finished the first quarter here at 1132. We do not look for that to continue. And we actually look to ratchet that back down to that 1122 or lower range here.

Speaker #2: So we would be ramping up buybacks accordingly to target that.

Emily Lee: Understood. Outside of buybacks, you increased the dividend this quarter. Are you exploring any other capital priorities? I guess, has your update for M&A changed at all? Is it mainly buybacks?

Speaker #5: Understood. And then outside of buybacks, do you increase the dividend this quarter? Are there any are you exploring any other capital priorities? And I guess has your appetite for M&A changed at all or is it just mainly buybacks?

Jeff Schweitzer: Right now, we've always wanted to keep some dry powder out there in case there were opportunities on the M&A front, whether it be in bank M&A, wealth M&A, and insurance M&A. Right now, the best use of our capital appears to be on buying back shares. Obviously, there's no real execution risk there. Our earn back period is still pretty short. We're going to continue to be somewhat aggressive on the buyback front, but be opportunistic if something of interest were out there. We are open to looking at M&A opportunities that may arise, more so than we probably were the last few years, given that we've done a lot of things internally, that we've gotten projects behind us that we think we're probably in a lot better place to be able to look at M&A opportunities. We're looking at them.

Speaker #3: So right now, I mean, we want to we've always wanted to keep some dry powder out there in case there were opportunities on the M&A front, whether it be in bank M&A, wealth M&A, insurance M&A.

Speaker #3: Right now, the best use of our capital appears to be on buying back shares. Obviously, there's no real execution risk there. Our earnback period is still pretty short.

Speaker #3: So we're going to continue to be somewhat aggressive on the buyback front. But the opportunistic, if something of interest were out there, we are open to looking at M&A opportunities that may arise.

Speaker #3: More so than we probably were the last few years. Given that we've done a lot of things internally, we've gotten projects behind us that we think have put us in a lot better place to be able to look at M&A opportunities.

Speaker #3: So we're looking at them. We would be open to an opportunistic strategic opportunity. But in the meantime, we will continue to be heavier in the buyback arena.

Jeff Schweitzer: We'd be open to an opportunistic, strategic opportunity. In the meantime, we will continue to be heavier in the buyback arena.

Emily Lee: Definitely makes sense. I guess just on the credit front, credit has remained stable, I guess. Is there anything you've been looking out for from borrowers that you're keeping an eye on?

Speaker #5: Definitely makes sense. And then I guess just on the credit front, credit has remained stable. I guess is there anything you've been kind of looking out for from borrowers that you're kind of keeping an eye on?

Michael S. Keim: First, there's no trends that we're seeing in our portfolio that are concerning, and I think that what we would look at is similar to what everybody else is looking at in terms of what is the impact of higher fuel costs and energy costs. Then we have a large ag book. What is the impact of shortfalls, and then obviously increases in fertilizer costs. At the present time, those customers that are in either the shipping/distribution business are putting surcharges in, so they're not impacted. We are in discussion with our ag clients. Most of them had bought and gotten their fertilizer in advance. It'll be a next year consideration, and one we'll have to evaluate in terms of how long the conflict remains and what the impact is on fertilizer prices as we move forward here.

Mike Keim: First, there's no trends that we're seeing in our portfolio that are concerning, and I think that what we would look at is similar to what everybody else is looking at in terms of what is the impact of higher fuel costs and energy costs. Then we have a large ag book. What is the impact of shortfalls, and then obviously increases in fertilizer costs. At the present time, those customers that are in either the shipping/distribution business are putting surcharges in, so they're not impacted. We are in discussion with our ag clients. Most of them had bought and gotten their fertilizer in advance. It'll be a next year consideration, and one we'll have to evaluate in terms of how long the conflict remains and what the impact is on fertilizer prices as we move forward here.

Speaker #3: First, there's no trends that we're seeing in our portfolio that are concerning and I think that what we would look at is similar to what everybody else is looking at in terms of what is the impact of higher fuel

Speaker #1: Cost and energy costs . And then we have a large ag book . So what is the impact of Chirp Falls ? And then obviously increases in fertilizer costs at the present time , those customers that are in either the shipping slash distribution business or putting surcharges in .

Speaker #1: So they're not impacted at . And our in discussion with our kind of ag clients , most of them have bought in , gotten their fertilizer in advance .

Speaker #1: So it'll be a next year consideration . And one will have to evaluate in terms of how long the conflict remains and what the impact is on fertilizer prices as we move forward here

Emily Lee: Got it. Thank you. Just lastly from me, can you just remind us what portion of the loan book is floating rate?

Speaker #2: Got it . Thank you . And then just lastly for me , can you just remind us what portion of the loan book is floating right

Brian Richardson: About a third of the book is purely floating. About 30% is fixed, and then we have the remainder, which is adjustable with a little bit longer reset dates.

Speaker #1: I'm about a third of the book is purely floating , about 30% is fixed . And then we have the remainder , which is adjustable with a little bit longer reset dates

Emily Lee: Okay, perfect. Thank you so much for taking my questions. Thanks again, guys.

Speaker #2: Okay, perfect. Thank you so much for taking my questions. Thanks again, guys.

Jeff Schweitzer: Thank you, Emily.

Speaker #3: Thank you Emily

Emily Lee: Thank you.

Operator 2: Again, if you would like to ask a question, press star one on your telephone keypad. At this time, we have a question from the line of Chris Reynolds with Neuberger Berman. Your line is open.

Operator: Again, if you would like to ask a question, press star one on your telephone keypad. At this time, we have a question from the line of Chris Reynolds with Neuberger Berman. Your line is open.

Speaker #4: Again, if you would like to ask a question, press star one on your telephone keypad. And at this time, there are no further questions.

Chris Reynolds: Good morning, gentlemen.

Brian Richardson: Hey, Chris.

Brian Richardson: Morning, Chris.

Chris Reynolds: Yeah, that was just a terrific quarter. My questions have been answered, but I just wanted to provide an observation that Neuberger became investors in your company back in 2009 when you raised cash selling shares around $17. Jeff, you and your management team have just done a superb job by taking a look at where your earnings are right now. You may be approximating a $4 per share normalized earnings rate. In that 2008, 2009 period, you were in the $1.60, $1.75 range. There's been a tremendous increase in the earnings production. Your market cap during that period has gone from about $270 million to $950 million. There's been a tremendous performance, and I think your stock does look undervalued.

Speaker #5: Around $17 . And you know , Jeff , your management , you and your management team have just done a superb job . You know , taking a look at where your earnings are right now .

Speaker #5: You may be approximating a $4 per share normalized earnings rate . And , and in that 0809 period , you were , you know , in the dollar $60 , 75 range .

Speaker #5: So there's been a tremendous increase in the earnings production and your market cap is during that period has gone from about 270 million to 950 million .

Speaker #5: And so been a tremendous performance . And I think your stock does look undervalued . And I support the comments that you made about stock repurchase .

Chris Reynolds: I support the comments that you made about stock repurchase, because if you look back during that period that I just referenced, your stock has topped out around $30 a share four times despite this increase in the earnings power of the company. My thought is, it looks like your stock's broken out and likely continue to move higher. The stock repurchase program really makes a lot of sense. I just wanted to provide those comments and congratulate you on the performance.

Speaker #5: Because if you look back during that period that I just referenced, your stock has topped out around $30 a share four times, despite this increase in the earnings power of the company.

Speaker #5: So , you know , my thought is , you know , it looks like your stock has broken out and likely continue to move higher .

Speaker #5: And the stock repurchase program really makes a lot of sense . So I just wanted to provide those comments and congratulate you on the performance .

Jeff Schweitzer: Thanks, Chris. We really appreciate it. It's good to hear your voice. I know it's been a little bit of a while, but appreciate you as a shareholder and all of our shareholders. We're excited about Q1. We're excited about the year. Obviously, there's a lot of uncertainty in the world, but I think we're in a good spot, and we're looking forward to having a really successful 2026.

Speaker #3: Thanks , Chris . We really appreciate it . It's good to hear your voice . I know it's been a little bit of a while , but .

Speaker #3: Appreciate you as a shareholder and and all of our shareholders , you know , we're excited about the first quarter . We're excited about the year .

Speaker #3: Obviously there's a lot of uncertainty in the world . But I think we're in a good spot . And we're we're looking forward to having a really successful 2026 .

Speaker #5: Thank you .

Chris Reynolds: Thank you.

Speaker #3: Thank you

Jeff Schweitzer: Thank you.

Speaker #4: I will now turn the call back over to Jeffrey Schweitzer for closing remarks .

Operator 2: I will now turn the call back over to Jeff Schweitzer for closing remarks.

Operator: I will now turn the call back over to Jeff Schweitzer for closing remarks.

Speaker #3: Thank you , Rebecca , and thank you , everyone for joining us today . We have our shareholders meeting this afternoon at 1130 .

Jeff Schweitzer: Thank you, Rebecca, and thank you everyone for joining us today. We have our shareholders meeting this afternoon. Well, at 11:30AM later this morning. If anybody participates in that, we look forward to talking to you again at that point. Otherwise, just really appreciate everybody's support. As I said a few seconds ago, we're really excited about the Q1 results and the year ahead of us and look forward to continue to perform at a high level. Have a great day.

Speaker #3: Later this morning . So if anybody participates in that , we look forward to talking to you again . At that point . Otherwise , just really appreciate everybody's support .

Speaker #3: And as I said , you know , a few seconds ago , we're really excited about the first quarter results . And , you know , the year ahead of us and look forward to continue to perform at a high level , have a great day .

Operator 2: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Q1 2026 Univest Financial Corp Earnings Call

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